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Olympic glory aside, 2008 will be remembered in China as a year of
massive natural disasters. Between the crippling ice storms that left
millions stranded during the Chinese New Year holiday last January and
February and the Sichuan earthquake in May that killed 88,000,
catastrophes touched a wide swath of the country and caused nearly
$200 billion in damage  more than four times the previous year.

This year isn't getting off to a much better start. On Thursday, the
government announced a severe drought emergency across eight central
provinces. The dry conditions have hit an important grain-growing
region south and west of Beijing at a time when the country is
struggling to keep unemployment in check. (See pictures of Olympic highs and lows in Beijing.)

More than 10 million hectares (25 million acres) of wheat, nearly half
the country's total winter wheat cropland, are now suffering, the most widespread water shortage since 1951, according to China's
Office of State Flood Control and Drought Relief. Beijing has not
recorded precipitation since for over four months, the state-run Xinhua news service reported. And across the provinces of Hebei, Henan, Shandong,
Anhui, Jiangsu, Shanxi, Shaanxi and Gansu, 4.3 million people and 2
million head of livestock are experiencing water shortages.

The government has budgeted nearly $60 million in relief aid for the drought, but that may not be enough to help the millions of unemployed migrant workers returning home to the region in coming months. An estimated 20 million of the country's 130 million migrant laborers
have been thrown out of work due to the global economic crisis. A lack
of buying overseas has led to factory closures and layoffs in China's
coastal manufacturing regions, and many people are heading back to
their homes in the interior. Most came from farming regions, and local
governments had hoped that agriculture could absorb some of unemployed
returnees. But with fewer crops to harvest, and herd reductions
imminent due to water shortages, there will be little need for more
hands.

"The drought will no doubt exacerbate rural unemployment, because
arable land is what most migrant workers resort to when they lose
their jobs in the cities, and now their last option is under what's
probably the most severe threat in decades," says Zhang Xinghua, a
researcher at the Chinese Academy of Social Sciences' Rural
Development Institute. "This will also have an impact on social
stability, though it's hard to gauge to what extent yet. But as the
overall economy further slows, I think the situation is likely to get
worse."